Effort to end oil tax breaks fails

by William Douglas - May. 18, 2011 12:00 AMMcClatchy Newspapers

WASHINGTON - Senate Democrats tried Tuesday to channel public anger at $4-a-gallon gasoline into passing a bill to repeal federal tax breaks and subsidies for five major oil companies, but they fell short.

After bashing large oil companies in a hearing last week, Senate Democrats mustered fewer than the 60 votes they needed under Senate rules to move the bill to a final vote. The final count was 52-48. Three Democrats - Sens. Mary Landrieu of Louisiana, Mark Begich of Alaska and Ben Nelson of Nebraska - voted against the measure. Only two Republicans - Maine Sens. Olympia Snowe and Susan Collins - voted for the bill.

Tuesday's action effectively kills the bill, which framed symbolically the different strategies that congressional Democrats and Republicans prefer for reducing budget deficits, confronting energy-policy choices and appealing for voters' favor.

Striking a populist pose, Democrats argued that big oil companies have huge profits and don't need tax breaks, even though ending them wouldn't cut deficits much. Profits for ExxonMobil, ConocoPhillips, BP America, Shell Oil Co. and Chevron Corp totaled about $35 billion in the first quarter. Ending their tax breaks would cost them about $21 billion over 10 years. The federal deficit is projected to be about $1.4 trillion this year, and about $7 trillion over 10 years.

Republicans said the breaks spur domestic oil production. They prefer to cut other spending, such as Medicare and Medicaid, whose skyrocketing costs fuel much of projected future federal deficits.

"Instead of actually doing something about high gas prices, our Democratic friends staged what one of my Republican colleagues accurately described as a dog-and-pony show," said Senate Minority Leader Mitch McConnell, R-Ky. "They rounded up what they believed were a few unsympathetic villains who they could blame for high gas prices, hoping nobody would notice they don't have a plan of their own to deal with them."